Facebook is about to get into the "e-money" game

Tuesday 15 April 2014 00:55 CET | News

Facebook is waiting for Irish regulatory approval for providing financial services in the form of remittances and electronic money, reports.

The approval from the Central Bank would enable the social network to offer consumers the possibility to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process, cited by the same source. By becoming an “e-money” institution, Facebook would issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe via a process known as “passporting”.

Obtaining an e-money authorisation in Ireland would require Facebook to hold capital of EUR 350,000 and segregate funds equivalent to the amount of money it has issued, according to legal experts.

The money transfer project signals a strategic shift for the company, which makes most of its money from advertising. It also comes as other internet groups in particular, China’s Tencent and Alibaba, race to turn their websites into mobile payment platforms.

Facebook has also discussed potential partnerships with companies that provide international money transfer services online and via smartphones. These include TransferWise, Moni Technologies and Azimo.

Facebook is already authorised for some forms of money transfer in the US, allowing it to process payments for developers who charge users for in-app purchases.

In 2013, the company facilitated USD 2.1 billion worth of transactions, almost exclusively from games, according to documents filed with the Securities and Exchange Commission. Facebook takes a fee of up to 30% for such payments, and these fees account for about 10% of its revenues. 

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: Ireland, Facebook, e-money, financial services, remittance, regulatory approval, monetary value
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce